Guide to buying an off plan apartment in Ukraine
Are you thinking about buying an offplan apartment in Ukraine? It's often a good way to get a lower cost property as developers will usually provide a discount when compared to exisiting property prices to compensate for the wait time whilst the unit is being built. Prices per m2 will also end to be lower at the early stages of the build. However, there are some key points to be aware of when looking at different off plan options and we have highlighted some of the main ones below:
Paperwork, permission and developer credentials are very important no matter which country you're buying in and Ukraine is no different. it's perhaps stating the obvious but any development must have planning permission approved by the municipality in which the property is located. Thankfully quite rare, there have been cases in Ukraine of projcts being offered for sale without correct permission and deposit should only ever be paid to a developer that has full planning permission.
At UAP we scrutinise paperwork before offering any project for sale. Does it have the correct building permission and is it correctly registered with the building authorities? if it doesn't then do not part with any money and move on.
We also look at the track record of developers. Have they built before, what was the standard of their build and do they adhere to building control requirements and deadlines? The projects we offer come from known and reputable developers that we have confidence in.
A shell stage finish
One of the key differences between off plan units in Ukraine and other countries is the level to which they are finished. In Ukraine it is the norm to offer properties that are described as a shell stage finish but what does this mean?
A shell stage is a property that is completed with windows, front door, screeding, centralised heating and in some cases copper wiring. It is a blank canvas to complete to your own tastes and make unique.
It is a requirement for apartments in Kiev to have a heating system. Without one installed, a development cannot be signed off by the municipality and the unit will not receive a completion certificate allowing the sale to complete. This is due to the cold winters and units whether occupied or not, must have some heat during the coldest times to protect the overall building.
Not all per m2 prices will habve the cost of the heating system included as some developers offer different packages. However, we will go throuh this with you if not already included. So do factor this into ownership costs.
Of course, the prices reflect a shell stage finish and allow the new owner to complete to their own specification and put their own finishing touches to a property. We're often asked how much does it cost to finish a property and typically, a good quality finish will cost around $350 per m2. Our firm is able to organise and manage building works on client's behalf if needed.
A brand new build will incur some higher purchasing costs than for existing properties. These are usually in the region of 3%-9% and exclude legal costs (this will depend on the value of the unit).
The buying costs will not be included in the advertised price for a unit so be sure to budget for them.
The price of a unit will often be advertised per m2 rather than a total cost. This is a useful way to gauge quickly how competitively priced a property is compared to another.
As an example, if a project has three sizes of units; a studio at 45m2, a one bed at 65m2 and a two bedroom at 85m2 and the price per m2 is $725 then the purchase price would work out as follows:
One bed: $47,125
Two bed: $61,625
Remember to factor in closing fees and finishing costs to this price to ensure that a property will still fall within your budget.
Are prices negotiable?
Prices for offplan units tend to be more inflexible than with existing properties and it is rare to get a discount on an off plan price. Sometimes developers will offer discounts if larger payments are made before completion.
Will I have to pay maintenance fees?
A maintenance fee will usually cover things like security, maintenance of common areas, gardening and this will come at a small monthly cost. It can range from 10 UAH to 15 UAH per m2 per month depending on what is covered.
It's important to buy into a project that has an establish management and maintenance system in place that will ensure the overall property remains in good condition. After all, it protects your investment and helps strengthen resale prospects in the future. So if a development does not have anything in place we would consider this a red flag.
Are there restrictions for foreigners to buy off plan property?
There are no restrictions for non-Ukrainian citizens to buy and own an off plan property in Ukraine. Nor do buying fees vary particularly. Properties can be owned outright in your own name.
With a standard property sale spousal permission is required however this is usuall not a legal requirement for off-plan purchases. This does save additional legal work and notar fees both in Ukraine and from our home countr if ou are purchasing remotely.
Ownership costs in Ukraine tend to be low and this is particularly true when it comes to annual property taxes. Apartments that are under 65m2 in size are exempt from any annual property taxes.
4 September 2020The Ukrainian Government has recently announced that the country's borders will remain closed temporarily to foreign visitors until September 28th. Certain visitors are exempt from the restrictions and please check on the official Government website prior
24 August 2020Over the past twelve months the Ukrainian property market has had to contend with some serious hurdles including an election, collapse of one of the largest construction firms and a global pandemic. Prior to this, the country's real estate market had prog
8 July 2020Many municipalities in Ukraine have been delayed in sending out this year's land tax bills to owners due to Covid-19 so many properties have not received their statement. We have received updates from a number of municipalities that they are now in the pr